Business reform on track at Pentagon

By Dan Verton

Feb 10, 2000

Although the "crushing weight of paper" still afflicts "virtually every corner" of the Pentagon's business processes, the Defense Department is well on its way to transforming itself into a virtual enterprise, according to a report issued by Secretary of Defense William Cohen.

Cohen's annual report to the president and Congress, released Wednesday, details significant progress on a range of reform issues, particularly the Pentagon's efforts to leverage information technology to improve its business practices and to adopt standard commercial processes.

According the report, the Pentagon's purchase card program, which is the department's preferred method of purchasing all items and services costing $2,500 or less, grew 1,113 percent in five years, jumping from 800,000 card purchases in fiscal 1994 to 8.9 million in fiscal 1999. In addition, the banks that issue the purchase cards have offered DOD significant financial rebates, saving the department more than $12 million between Dec. 1998 and June 1999, the report stated.

Likewise, the DOD Electronic Mall, a one-stop online shop that offers access to DOD electronic and commercial product catalogs, has grown significantly. The E-Mall now offers users access to 2.3 million products and in fiscal 1999 sales reached $51.5 million, according to the report.

"Today, defense organizations obtain low-cost commercial goods and services within days rather than months," the report stated.